Mark's Quill

For-Profit vs. Charity and CEO compensation

In light of all the hoopla surrounding the CEOs of not-for-profit organizations, it is necessary to point out that there is a night to day difference between monies derived from "for-profit" enterprises and "not-for-profit charities". "Charities" are not the same as "clubs/organizations", nor should clubs/organizations that are not "charities" be granted special privilege at the expense of the taxpayers.

For-profit enterprises are limited only by what they can sell to people who are willing to buy their product/service. For-profit enterprises are compensated according to the marketability of their products or services as determined by their customer's willingness to purchase.

A club or organization is limited only by those who choose to purchase social status within said club/organization and all taxes should be applied the same as with any other for-profit enterprise because they're selling something. Purchasing membership in some so-called "professional organization" amounts to nothing more than buying social status.

A not-for-profit charity is a not only a different critter, it's a complete different species from a for-profit entity. Any group/organization that accepts donations for the purpose of redistributing that money, or turning it into services, for the needy, is a "charity" and as such, they need to play by different rules. Any group that doesn't redistribute at least 80% of it's intake to the needy, should not be considered a "not-for-profit". So point number one, there are way too many groups claiming not-for-profit status that shouldn't be. Political and social activist groups should not be considered the same as a "charity", and no matter how creative the marketing, they're still nothing more than private "members only" clubs.

Nonetheless, all not-for-profits need to be held accountable by their donors; therefore, their accounting needs to be an open public record. Any not-for-profit that isn't willing to be open, and honest. with their books, isn't worthy of donating to. They need to show exactly where the money goes without any 'creative accounting'. The CEO of any charity should never accept more than thirty percent above the national average wage; if they want to rake-in big bucks, they need to seek employment in a for-profit enterprise.

Not-for-profit organizations should also be held accountable to maintain reasonable expense accounts. They need not be using charter aircraft, first-class fares, and limousines to ferry the CEO, or anyone else. Coach gets there the same time as first-class; a taxi functions the same as a limo; shower and sleep are the same in Motel 6 as they are in the Waldorf. In fairness, a reasonable "expense account" for the CEO doing charity business, should not be considered "compensation" provided it is used only for legitimate business expenses just the same as on the for-profit side.

A step further ... if the CEO of a charity wishes to produce products to be sold for-profit, then there needs to be a clear and concise separation between "personal" and "charity" related works. If the CEO produces a book about his/her life, then it should be considered a for-profit work and subject to all the for-profit rules; however, the profit is the CEO's personal money. On the other hand, if the CEO produces work related to, or directly affected by, the charity they're in charge of, the funds derived from sales of those works should go directly to the charity and not the CEO, because without the charity, the CEO would not be able to produce said works. IE: Joe Schmo writes a book about his life, the profits are Joe's to keep and claim as his personal income. Joe Schmo writes a book about his time as CEO of Megacharity, the profits should go to Megacharity, because without Megacharity, no one would care about Joe Schmo.

Transparency, organizational accountability and personal accountability are not just important to a charity, they're essential! I refuse to support any for-profit, or charity that violates my core principles. I don't make any donations to any charity until I know where my money is going, and there isn't complete transparency, there's no money transferring from my pocket to theirs. When I give one in need food or money, I know exactly where one-hundred percent of my donation went.

I will digress a bit further to say that any group or organization that receives taxpayer money is neither a charity, nor not-for-profit; as soon as one penny of taxpayer money is accepted, they are by default a government agency and should be held accountable as such by the taxpayers. If we want separation of Church and State, then the State must be prohibited from giving money confiscated from the taxpayers to any group or organization outside of the government as defined in the US/State Constitutions. Why is no one pitching a fit about sports players who are turning millions of dollars personal profit annually solely because the government forced taxpayers to provide them with a place to operate their business? Let the NFL, NBA, philharmonic, gallery, etc. build their own places of business and jump through all the nonsensical oppressive government hoops that every other business has to! Why is there no outrage over the government confiscating money from taxpayers and using for the personal benefit of others?

Blessings!